Reuters: Global Markets: SolarWinds forecasts quarter below estimates; shares slump

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SolarWinds forecasts quarter below estimates; shares slump Jul 25th 2013, 22:20 By Lehar Maan and Neha Alawadhi Thu Jul 25, 2013 6:20pm EDT (Reuters) - Network management software maker SolarWinds Inc (SWI.N) forecast current-quarter results below market expectations as the company struggles with slowing growth in its licensing business, sending its shares down 22 percent after the bell. The company, which also narrowly missed revenue estimates for the second quarter, makes software that helps manage network devices, virtual servers and storage devices. SolarWinds forecast adjusted earnings of 35 cents to 36 cents on revenue of between $84.7 million and $87.2 million for the third quarter. Analysts on average were expecting earnings of 39 cents per share on revenue of $90.5 million, according to Thomson Reuters I/B/E/S. "Their guidance suggests that license growth deceleration will continue down to zero or low-single digits in the second half," BMO Capital Markets analyst Karl Keirstead said. Licensing contributed 46 percent to SolarWinds' revenue last year. The company also posted lower-than-expected second-quarter revenue due to the slower growth in license sales. Revenue rose 21 percent to $77.5 million, but missed analysts' expectations of $78.9 million, according to Thomson Reuters I/B/E/S. "Our license sales results did not meet our expectations," SolarWinds CEO Kevin Thompson said in a statement. Net income rose to $22.8 million, or 30 cents per share, from $19.4 million, or 26 cents per share, a year earlier. Excluding items, the company earned 40 cents per share, above analysts' expectations of 36 cents. Shares of the Austin, Texas-based company closed at $46.09 on the New York Stock Exchange on Thursday. (Reporting By Lehar Maan and Neha Alawadhi in Bangalore; Editing by Don Sebastian and Sriraj Kalluvila) Link this Share this Digg this Email Reprints

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